Factory losses strike deepest in rural Iowa

Kirk McCullough knows rural towns, heavily dependent on manufacturing, are in danger.

"It feels like the jobs are moving to big cities, metropolitan areas. But I'm not ready to say we're going to turn into a ghost town. We'll turn it around," McCullough said. He owns Seneca Foundry, a 100-year-old company in Webster City, the latest Iowa town to learn its largest employer will close its plant.

While few Iowa communities have escaped layoffs in the past year, the current recession has hit factory jobs harder in rural towns than in metro areas, new data from Iowa State University show.

Boone, Mount Pleasant, Ottumwa and other places with fewer than 30,000 residents have lost nearly 20,000 factory jobs since 2007, when the current recession began nationally. That's twice as many production positions than Iowa has lost in metro areas such as Des Moines, Cedar Rapids and Davenport, data from ISU economist Liesl Eathington show.

The loss of factory floor jobs may seem a remote concern for city office workers, but the fate of small-town manufacturing — usually high-paying jobs with good benefits — is crucial to Iowa's economy.

Production of grain bins, car crushers and cereal makes up the largest chunk of Iowa's economy at 21 percent, about $28.2 billion of the state's $135.7 billion gross domestic product, 2008 federal data show. Manufacturing contributes more to Iowa's economy than insurance and finance, construction, and agriculture combined. Iowa's economic dependence on manufacturing ranks second in the nation only after Indiana.

With the odds stacked against them, economic development leaders in Webster City and elsewhere are looking to renewable energy, entrepreneurs and existing companies to replace lost manufacturing jobs. One key will be worker willingness to retrain, experts say. More.